Per stirpes is a legal term. People often use it to describe how an inheritance is distributed to the beneficiaries of an estate. The definition can be confusing, but don’t worry – we’ll explain it all in this article! So what is per stirpes in estate planning exactly? And is this something for you?
Per stirpes is a legal term for inheritance distribution
Per stirpes is a legal term as we said before. It means “by branch”, and it and it actually does exactly what the name suggests. It distributes estate to your beneficiaries by branch. But what does that mean?
Per stirpes allows each beneficiary and their heirs to receive shares. This is based on how many generations they heirs are removed from the deceased person’s bloodline; instead of having one person receive everything after your death, per stirpes creates another way of distribution. Per stirpes takes into consideration the heirs of your heirs too. Let’s see an example.
Example of per stirpes
So let’s say you have two children, a son and a daughter, that you are including in your last will as beneficiaries. Unfortunately your son passes away unexpectedly before you. He had two children – your grandchildren. If you have a per stirpes arrangement then your daughter will get half of your estate. The other half will go to the children of your son so they can split it equally. That was the share of assets that originally corresponded to your son. However by branching out (per stirpes) your son’s kids will get their father’s share.
If no per stirpes arrangement was in place you could select and alternate beneficiary. Or even choose your surviving child (your daughter in this case) to be your only beneficiary. That would exclude your son’s family as beneficiaries.
Is per stirpes only for last wills?
No. Per stirpes is not just for wills. You can also use them in trusts and living trusts.
The usually are no notable differences between a will and a trust when it comes to per stirpes. You can make such arrangements when you’re drafting these documents. Additionally, you can do this yourself or hire a lawyer.
Why choose a per stirpes distribution of property?
You may want to distribute property per stirpes if you don’t want to leave all of your assets to one beneficiary. Per stirpes distribution also protects your beneficiaries and their families. How? By continuing to have be eligible beneficiaries of assets even if they’re not the main beneficiary. Per stirpes is for you if you want to protect a specific branch of your family.
This way, a deceased beneficiary’s inherited assets would then go to their children or other heirs.
Is per stirpes for everyone?
Per stirpes is the best option for estate planning for the case we described above. However, let’s say you prefer to include an entirely new beneficiary upon a beneficiary’s passing. In that case there are other options better suited for you. Or let’s say that you want your remaining beneficiaries to get share the part of your estate that originally corresponded to the deceased beneficiary. Then, again, per stirpes is not for you.
Keep in mind that often you can customize your distribution plan as much or as little as possible. This depends on how much control over the distribution process matters to you.
It's important to understand how property distribution works
When you put the time and effort into planning your estate, it’s important to understand will happen after your death. Per stirpes describes a set of instructions that ensure assets pass in a specific way. Here is another example:
We have individual’s A, B, C. You can arrange for an asset to go first to A’s children. Then, if they don’t survive it will go to B’s children. Finally, if none of them survive then the property will go to C’s children.
In conclusion, per stirpes is a great way to ensure that your heirs get what they deserve. Whatever type of distribution method you choose for your estate plans, make sure it’s something you can live with. Make also sure that the kind of distribution you chose makes sense for everyone involved in the process!
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